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Business panel discusses carbon tax -

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LEIGH SALES, PRESENTER: The business community has been calling for certainty on climate change
policy for a long time and the Gillard Government's carbon tax announcement goes some way to
address that. But there are still big questions about the effect this will have on the economy and
whether it will make any meaningful difference to carbon emissions.

Earlier I spoke to two of Australia's highest profile and most connected businessmen; in Sydney,
Geoff Cousins, Telstra board member and a former chairman of George Patterson Advertising, and in
Melbourne, Ziggy Switkowski, the incoming chairman of Suncorp and the former Telstra CEO.

Gentlemen, welcome to both of you.


LEIGH SALES: First of all I just wanted to ask: what's your broad opinion of the package that's
been announced today, Mr Cousins firstly?

GEOFF COUSINS, TELSTRA BOARD MEMBER: Well, look, I think it's a historic moment, actually, in
recent Australian political history. I mean, the last three prime ministers of Australia have tried
to get this sort of package put together in one form or another. Two failed. The present one has
apparently succeeded. And that's a very significant thing.

This is about new technology. This is about changing the source of our energy, and that is going to
happen in the world. And you never beat new technology. New technology always wins. And people who
run away from it, who delay getting into it, are always the losers; and people who are the first
movers, who take advantage of it early, they're always the winners.

LEIGH SALES: I'll come to some specifics shortly, but first let me ask you, Mr Switkowski, what's
your opinion broadly of the package that's been announced?

ZIGGY SWITKOWSI: Leigh, I think the headline about "clean energy future" captures the theme of the
package. It's certainly gonna change the economy and our energy generation industry to move more
aggressively towards renewable energy. But the journey is gonna be expensive. We are gonna turn our
backs, as the Greens have said, on a past where fossil fuels were a source of competitive
advantage. It will make government and bureaucracy more intrusive in our lives and it'll make
precious little difference to our greenhouse gas emissions.

LEIGH SALES: What do you think of that, Mr Cousins?

GEOFF COUSINS: No - well, I agree with the first part of that, but certainly not the last. I think
it will make a very substantial difference over time. And it is about lessening pollution. That is
what it's all about. The argument now develops into all sorts of economic sideshows, but we're
talking about dealing with something that everybody knows is the case, that the world is becoming
more and more polluted and that we have to do something about it.

LEIGH SALES: But is it viable to expect once carbon is priced that we're in a position in Australia
where the alternative energy sector's ready to step up and fill the gap?

GEOFF COUSINS: No, they won't be ready to step up and fill the gap right away, but you have to get
on and do something, you see. You can't just sit back and say, "Well, I'll wait and see what
happens." And yes, there will be some costs, and yes, it will be a very difficult political message
to get across, but it will be fundamentally good for this country.

LEIGH SALES: Mr Switkowski, you've been highly critical of the Gillard Government's energy policy,
or what you see as the lack of policy. Does this package give you any cause for confidence?

ZIGGY SWITKOWSI: Oh, look, I think it's definitely a step in the right direction, in part because
it's now made a full-blooded commitment to renewable energy. It's called clean energy, but
basically it's wind and solar for as far as we can see, perhaps geothermal down the line. And when
the Prime Minister talks about a $100 billion investment in clean energy, if that happens by 2050,
then that would lead to having perhaps half of the nation's electricity being generated by these
new technologies. That's a - I mean, that is a full-blooded commitment. Personally I think that is
a risky path. I don't see any other country around the world with resources considerably greater
than Australia's embarking on this journey with the same level of aggressive milestones. But I
can't criticise the Government for lacking vision or intent. They are gonna take us down this path.
And the question I think, Leigh, will be whether the program as it's proposed survives long enough
to make a difference.

LEIGH SALES: Mr Switkowsi, is it possible that the compensation is so generous that it will water
down the effect of the carbon tax on consumer and business behaviour?

ZIGGY SWITKOWSI: Well, certainly it won't shift consumer behaviour; not anytime soon. But any form
of carbon price, whether it's $23 a tonne of carbon dioxide or less or more, will cause business to
think longer term about what sort of investments to make in their various energy generation and
energy consuming processes, and that will shift behaviour. And I think that's generally understood.
Set a carbon price, establish that you're determined to make it stick over a generation and that
will shift behaviours. So that I think will happen. Whether at the end of the day, Leigh, we're
gonna have a measurable reduction in our emissions and whether even substantial reductions make any
difference to the global climate, I think it's clear that that can't happen.

LEIGH SALES: What do you say to that point, Mr Cousins, and also to the point that Mr Switkowski
raised about the fact that it's a risky path because he doesn't see other nations embracing this
sort of reform on this sort of scale?

GEOFF COUSINS: Well, Mr Switkowski of course has been the leading proponent for nuclear energy. But
I agree with what he says about the price on carbon is going to drive people to develop solar and
wind. The more you price carbon, the more you drive investment into those areas and the quicker
these things come. So that I see this as a very positive move indeed. And to be at the forefront of
that, that will make us one of the real winners around the world. If we hang back and wait, then
we'll be what always happens in those circumstances: we will not reap the benefits of it.

LEIGH SALES: Mr - sorry, go. Yep.

ZIGGY SWITKOWSI: Can I just make a point, Leigh? In that Australia has enjoyed its economic success
and our prosperity in large part on having affordable available low-cost electricity on the back of
burning coal and gas. And that has been a point of competitive advantage. What we're now proposing
to do is embark on a future where we leave that behind and we introduce renewable energy as other
countries are going to do it. Without any confidence that we can do it better than other countries,
arguably there's no reason to expect that. So we're moving from a point of advantage to a point of
at best being the same as the rest of the world. I hope that we're doing that with our eyes open,
because I do think that there is a risk to our economic prosperity ahead by doing this either too
quickly or following a path that is simply too expensive.

LEIGH SALES: I want to finish by asking you both a broader question. In a recent interview James
Packer gave in the Australian Financial Review magazine, he said, "I think the problem for the
Prime Minister at the moment is while she keeps saying she's pro-business, there's a real
perception in the corporate world that she's not. This perception is a real problem which she needs
to address soon." Do you think that's correct, Mr Switkowski?

ZIGGY SWITKOWSI: Look, I think if you took the example of the clean energy future package, it's not
pro-business. On the other hand, it's really not anti-business either. But as the Prime Minister
emphasised, it is very consistent with the ideology of the Labor Government. It's about - partly
about wealth distribution. It's partly about tuning the tax system. It's partly about getting
people employed.

But the projections of the Treasury modelling say that the economy over the next 20 years won't be
improved by this package. Jobs will not be increased by this package. We are gonna take an
increased economic risk, and in the pursuit of what is clearly immeasurably small impact on our

So, I don't think the Government is anti-business, but I think their first reaction is not to think
about business's interests.

LEIGH SALES: What do you think, Mr Cousins?

GEOFF COUSINS: I don't know whether the Government's pro-business or whether it isn't, and I don't
really care, to be perfectly honest.

LEIGH SALES: What's the perception, though?

GEOFF COUSINS: I think this particular package however is pro-business in the sense that it will
drive business people to do things that they don't particularly want to do right at the minute
because they're taking a short-sighted point of view. If you just left it clearly to these
businesses at the moment, they wouldn't get into these new technologies at all.

LEIGH SALES: But what about this point James Packer raises that there's a perception in the
business community that the Prime Minister's not especially pro-business?

GEOFF COUSINS: Ohh, look, you know, business is always carping about one government or another,
quite frankly. I do think governments very frequently tend to give lip service to business
interests, and there's an old saying in Canberra: "There are no votes at the big end of town." That
comes from all governments, not I don't think particularly from this one.

I think the major worry in business is that, up to this point, the Government hasn't really got a
lot done. This I think could be a circuit-breaker because I think initially people will have doubts
about it, as they have at the minute. But assuming the benefits of this scheme are properly
communicated, I think it could be quite a circuit-breaker for the Prime Minister and the

LEIGH SALES: Business leaders Geoff Cousins and Ziggy Switkowski there.